Payday loans have gained quite a bit of negative press, mainly due to the shady lending practices of some of the payday loan lenders. We wish we could say that all lenders were legitimate and trustworthy but unfortunately that’s just not the case. There are lenders who seek to take advantage of people who are experiencing financial hardships and are sometimes desperate to get money. The best defence against shady lenders is to know how to identify potential scam artists who are looking to cheat you and practice unethical lending methods.
Can you contact them?
One of the first things you should look for when researching payday lenders is how easy it is to contact them. Every lender should have these three things at a minimum:
- Phone Number
- Email Address
If a payday lender has no way of contacting them it is a big red flag. Every online lender should have a contact page where you can send inquiries to if you have any questions. If the only thing you see on the website is a form to apply then exit the screen. If there is a phone number, call it to make sure it is legitimate. If you’re going to be entering into a contract with someone you want to be sure that you can contact them when you need to.
Is the site Secure?
When applying for payday loans online, you want to make sure the site is secured. You can look for the Verisign Secured badge on the site. Another thing to look for is in the URL address bar you want to see “https:” instead of “http:” if you’re entering any type of personal information like your social security number or banking information. This is more to protect your information from hackers but still, failure to have this feature could be a sign of a bad lender.
There should not be any type of secrecy in regards to your payday loan. If you get the impression that a lender is hiding something from your or withholding information about your loan terms then that’s usually a bad sign. Legitimate payday lenders will gladly answer any and all questions and make sure that you fully understand the loan terms before signing up.
You should have an idea of what is going on throughout every step of the process. If at any point you feel confused or lost, your lender should be able to explain exactly what is going on. An example of being a non-transparent lender would be if you are being charged fees and the lender cannot give you a definitive answer on what the fee is for. This is a huge red flag and could potentially land the lender in legal trouble for unfair lending practices.
Before applying for a payday loan, you should do some research on the company. At the minimum, Google the name of the company and see if any bad reviews or scam stories show up. The internet has made it possible for past customers to post stories of their dealings with lenders. So read up and see what kind of information you can find. Taking a few minutes to search for information on your payday lender online can save you a huge headache later on.
By remaining vigilant you can make sure that the company you chose is legitimate and you can get the most positive experience with your loan.
Before you take out any form of loan, you need to ask yourself whether borrowing money is the right thing for you.
If you can cut down on your spending or put off buying something until you’ve saved for it, do that.
If you are borrowing money to make repayments on other loans and debts, you may be in a vicious circle and it might not be the best thing to do.